Japan to tax profits on bond sales from Jan. 1

posted on December 30, 2015

From Jan. 1, Japan will tax profits on bond sales and allow investors to cut their tax payments by offsetting gains and losses in bond trading with those in equity transactions.

The bond sales tax, to be set at 20.315 pct, the same as the tax on profits from equity transactions, is designed to promote shifts in individual money from savings to investment, sources said.

Public and corporate bonds in investment trusts, such as money management funds, will become taxable as well.

Previously, many investors held bonds until maturity. But in recent years, not only institutional but individual investors have been actively trading bonds before maturity to take windfall profits. Under the circumstance, fairness of taxes has been questioned, as stock sale profits are taxed while bond sale profits are not.

source by jiji
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